IBI-Rating has affirmed the credit rating of «UPSK» PrJSC at uaAA grade

Rating agency IBI-Rating informs on affirming of the credit rating of «UPSK» PrJSC at uaAA grade, with a «stable» outlook.

«UPSK» PrJSC has been working in the insurance market since 1992. The majority shareholder and Chairman of the supervisory board is Mikhailov Aleksandr Mikhailovich, who owns 61.74% of the shares. The insurer is a member of the Motor (Transport) Insurance Bureau of Ukraine and has 36 licenses for carrying out insurance business (20 types of voluntary insurance, 16 types of compulsory insurance). Despite the strong competition in the Ukrainian insurance market, «UPSK» PrJSC demonstrates a relatively stable position among more than 250 participants of the insurance market (non-life), entering in the TOP 20 market leaders in terms of key indicators: the volume of insurance reserves, assets, equity and attracted premiums. In terms of the volume of attracted premiums under MOTPL contracts over the past years, the company has consistently been a part of the 5 largest participants in the insurance market of Ukraine. The insurer has a sufficiently developed regional network, which is located in all oblasts of Ukraine. In addition the company is represented by about 1000 branches of sale the insurance products and customer service centers which are operating on the basis of agency agreements.

The positive factors of the insurer's activity should include a substantial stock of assets that may be represented by insurance reserves. Moreover, the assets allocation, which are formed by insurance reserves, is assessed as acceptable. Additionally, it should be noted that the diversification of bank deposits in the context of banking institutions (including state institutions) is sufficient, indicated banks have determined the credit ratings that correspond to the high investment level of the national rating grade. In turn, an increase in administrative and service costs (agency fees and costs of brokering services, advertising costs, etc.) have a negatively affects on the performance indicators - the net financial result for the first half of 2018 was negative and amounted to UAH(-) 10.3 million.

The affirmed credit rating is due to its acceptable capitalization and solvency ratios, high quality and sufficient diversification of the assets, which represent insurance reserves. In turn, the Rating agency notes the loss-making main activity of the company, the high value of the combined loss ratio, the instability of the operating environment, the variability of the regulatory field, as well as the sensitivity of the company's revenue base to changing the situation in the real sector. At the same time, it should be noted that the Insurer does not have any debt burden, but has a good quality of reinsurance operations, broad client base, high level of prolongation of insurance contracts and well-developed sales channels, which contributes to stable dynamics of insurance premiums.

In order to conduct the analytical research the materials provided by «UPSK» PrJSC, have been used, including: annual financial statements for 2015-2017 and 6 months of 2018, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

Financial department
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